Recent talks among the countries leading leaders about what to do regarding paying off their overgrown debts have led to discussing cuts in child benefits.
The plan is to cut benefits for parents with higher incomes. On the face of it, which seems about as far as they have looked, this seems like a reasonable idea. Parents who do not need extra money will not be provided any to make room for those who do need the help.
More intellectually inclined people however, have found a number of holes in Prime Minister David Cameron and Chancellor George Osborne’s plans.
Their plan is to cut benefits for a parent earning over £42,000. The problem arises in that this only accounts for one earner.
If a father works and earns £80,000 a year, while the mother stays home with the family, they will not receive benefits. However, if both father and mother work and earn £41,000 each, they will continue to receive benefits.
The buzzword floating around regarding the situation is ‘cliff-edge issue.’ If one parent is earning £43,000 and the other is a stay at home spouse, they will lose their benefits, which could amount to a few thousand pounds a year.
The unfairness is obvious here as you see one couple bringing in £43K lose their benefits while another couple earning £82K still get them.
Cameron and Osborne are both using the phrase ‘We always said we would look at the steepness of the curve.’ Whatever that means.
If I can throw in my two cents here, I would suggest that the simple fix would be to find a threshold that relates to total income of a couple rather than two individuals. It seems so simple I’m surprised no one else has thought of it.
By Lewis Roe
